Financial Services Commission of Ontario
Neutral Citation: 2016 ONFSCDRS 72
FSCO A12-005163
BETWEEN:
HASSAN ID Applicant
and
UNIFUND ASSURANCE COMPANY Insurer
Before: Stuart Mutch
Heard: October 28, 2015, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances: Mr. Grillone for Mr. Id Ms. Sharla Bandoquillo for Unifund Assurance Company
REASONS FOR DECISION
*Minor errors on pgs. 2 and 5 corrected on March 30, 2016 in accordance with the Dispute Resolution Practice Code and section 21.1 of the Statutory Powers Procedure Act.
Background:
The Applicant, Hassan Id, alleged that he was injured as the result of a motor vehicle accident that took place on June 21, 2010. He applied for and was paid caregiving, attendant care, housekeeping and medical benefits from Unifund Assurance Company (“Unifund”), according to the Schedule1 (“the 1996 Schedule”).
In an arbitral decision dated March 24, 2014 Mr. Id was found not to have been involved in an accident on June 21, 2010, as he alleged. That decision was upheld on appeal to a Director’s Delegate on December 23, 2014.
Unifund now claims repayment of benefits that were paid to Mr. Id and to treatment providers. The parties agree that the following benefits were paid by Unifund pursuant to Mr. Id’s claim:
Housekeeping Expenses: $ 2,927.02
Attendant Care Benefits: $ 2,831.71
Caregiver Benefits: $ 8,145.46
Medical/Rehabilitation: $19,311.31
Issues
- Is Unifund entitled to repayment of benefits paid to Mr. Id?
- Is Unifund entitled to interest on any repayment?
- Is Unifund entitled to its expenses of this hearing?
Result:
- Unifund is entitled to repayment of housekeeping, attendant care, and caregiver benefits paid to Mr. Id in the amount of $13,904.19.
- Unifund is entitled to interest on the sum in item 1 above at the bank rate in effect on March 21, 2013, calculated from March 21, 2013, in accordance with subsections 47(6) and 47(7) of the 1996 Schedule.
- Unifund is entitled to its expenses in the amount of $10,266.88.
ANALYSIS OF ISSUES
1. Repayment
Unifund alleges that the Applicant falls squarely within the provisions of s. 52 of the 2010 Schedule (the equivalent section is section 47 of the 1996 Schedule).
The relevant portions of section 52 read as follows:
52(1) Subject to subsection (3), a person is liable to repay to the insurer,
(a) any benefit described in this Regulation that is paid to the person as a result of an error on the part of the insurer, the insured person or any other person, or as a result of wilful misrepresentation or fraud…
(2) If a person is liable to repay an amount to an insurer under this section,
(a) the insurer shall give the person notice of the amount that is required to be repaid; …
(3) If the notice required under subsection (2) is not given within 12 months after the payment of the amount that is to be repaid, the person to whom the notice would have been given ceases to be liable to repay the amount unless it was originally paid to the person as a result of wilful misrepresentation or fraud. O. Reg. 34/10, s. 52 (3).
(5) The insurer may charge interest on the outstanding balance of the amount to be repaid for the period starting on the 15th day after the notice is given under subsection (2) and ending on the day repayment is received in full, calculated at the bank rate in effect on the 15th day after the notice under subsection (2) is given. O. Reg. 34/10, s. 52 (5).
(6) In subsection (5),
“bank rate” means the bank rate established by the Bank of Canada as the minimum rate at which the Bank of Canada makes short term advances to the banks listed in Schedule I to the Bank Act (Canada). O. Reg. 34/10, s. 52 (6).
(emphasis added)
Unifund’s Position
Unifund alleges that the payments made to the Applicant were the result of wilful misrepresentation, specifically that the Applicant alleged that he was in the vehicle at the time of the subject accident, when he was found not to have been nor to have been in the vicinity of the vehicle at the time of the collision.
Unifund alleges that all the monies paid out pursuant to the Applicant’s claim are eligible for repayment to the Unifund, whether they were paid directly to the Applicant or not.
The Applicant’s Position
The Applicant takes the position that there was no finding at the preliminary issue hearing that there had been wilful misrepresentation or fraud on the part of the Applicant. As well, the Applicant takes the position that the Applicant should not be liable to repay the medical and rehabilitation benefits paid to third parties.
Analysis
The Applicant’s counsel is correct when he states that there is no specific finding of wilful misrepresentation or fraud in the preliminary issue decision. However, that was not the issue. The issue before me at the preliminary hearing was whether the Applicant had been involved in an accident, as defined in the 1996 Schedule. I found that he was not. Mr. Id claimed to be an occupant of the subject van at the time of the accident. The balance of the evidence indicates otherwise. The Applicant’s counsel, in his submissions, claims that the decision simply demonstrates a preference for one version of the accident over another. That is a characterization that applies to any fact-finding process where credibility is an issue. In claiming to be involved in the accident for the purpose of claiming benefits, Mr. Id is guilty of wilful misrepresentation. The suggestion that Mr. Id has not engaged in wilful misrepresentation with regard to his involvement in the June 21, 2010 collision is wholly inconsistent with the findings of fact in the decision.
With regard to liability for repayment I have been provided with three cases2, all which consider section 47 of the 1996 Schedule, the predecessor section to s. 52 of the Schedule. Both section 47 and section 52 speak specifically of a benefit that “is paid to the person”; it does not refer to payments made to third parties.
Unifund has drawn my attention to a case3 decided in the Small Claims Court Division of the Ontario Superior Court of Justice whereby the Court ordered repayment of medical and rehabilitation benefits.
In reading the case, it is apparent that section 52 (the successor of section 47) was not considered by the Court. The defendants in that case were unrepresented and it is likely that the argument that they were liable only for sums paid directly to them was never raised. There is no evidence it was ever considered.
I prefer, and find more persuasive the opinions expressed by Arbitrators Allen, Feldman and Bujold in Yusuf, Addae, and Abdulkadir, respectively, that section 47 of the 1996 Schedule (and section 52 of the 2010 Schedule) refer specifically to benefits that are “paid to the person”, and that the section should be given a restrictive interpretation.
The documentary evidence provided shows that Housekeeping and Home Maintenance Benefits, Attendant Care Benefits and Caregiver Benefits were paid directly to Mr. Id.4 At the hearing, the parties agreed that the sums relating to these benefits, set out in Exhibit 1, Tab 1, are the amounts Unifund paid directly to Mr. Id. They are:
Housekeeping Expenses: $ 2,927.02
Attendant Care Benefits: $ 2,831.71
Caregiver Benefits: $ 8,145.46
Medical/Rehabilitation: $19,311.31
I find that these amounts were paid to Mr. Id as a result of his wilful misrepresentation regarding his involvement in the collision. He is therefore liable to repay that amount to Unifund.
2. Interest
Unifund claims that it is entitled to interest on the sum owing from March 21, 2013, fifteen days after Unifund provided Mr. Id with notice of the amount that is required to be repaid.5 I find that Unifund is entitled to interest on the outstanding balance at the bank rate in effect on March 21, 2013, starting on March 21, 2013, in accordance with subsections 47(6) and 47(7) of the 1996 Schedule.
3. Expenses
As part of the oral submissions, Unifund claimed its expenses in this hearing. I invited both parties to make submissions as to expenses at the hearing. I received a Bill of Costs from counsel for Unifund dated February 22, 2016. I have not received any submissions from the Applicant’s counsel.
The criteria I may consider in making an order for expenses is set out in the Expense Regulation.
Among those criteria are:
- Each party’s degree of success in the outcome of the proceedings
- The conduct of a party or party’s representative that tended to prolong, obstruct or hinder the proceeding
Unifund has enjoyed a considerable degree of success in this hearing, with the exception of its claim for repayment of medical and rehabilitation expenses. I find that Mr. Id’s opposition to repayment of benefits, when he clearly was not entitled to them, has prolonged these proceedings. I find it appropriate that Unifund be awarded some of its expenses incurred in pursuing this matter.
I find the number of hours claimed by Ms. Bandoquillo, counsel for Unifund, to be excessive. I will allow 45 hours for preparation and attendance at the preliminary issue hearing and 15 hours for preparation and attendance at the main hearing, where the sole issue was repayment. I will allow one hour for Mr. Grossman, as set out in the Bill of Costs, 8 hours for the work of the student-at-law and 2 hours for preparation of the Bill of Costs. I will allow all of the claimed disbursements, except the claim for an interpreter and office booking, which I assume is a cost related to the Examination Under Oath, and is not part of this proceeding. The total expenses awarded, calculated at the present Legal Aid Tariff is $8,266.71 plus $1074.67 HST plus $925.50 for disbursements.
March 1, 2016
Stuart J. Mutch Arbitrator
Date
Financial Services Commission of Ontario
Neutral Citation: 2016 ONFSCDRS 72
FSCO A12-005163
BETWEEN:
HASSAN ID Applicant
and
UNIFUND ASSURANCE COMPANY Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- The Applicant, Hassan Id, shall forthwith repay the sum of $13,904.19 to Unifund Assurance Company in accordance with section 47 of the 1996 Schedule, plus interest thereon at the bank rate in effect on March 21, 2013, calculated from March 21, 2013, in accordance with subsections 47(6) and 47(7) of the 1996 Schedule.
- The Applicant, Hassan Id shall forthwith pay the sum of $10,266.88 in expenses to Unifund Assurance Company in accordance with Rule 79.1 of the Dispute Resolution Practice Code.
March 1, 2016
Stuart J. Mutch Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- Yusuf and Ahmed and TD Home and Auto Insurance Company (FSCO A04-001797 and A04-001522, May 31, 2006), Addae and Dominion of Canada General Insurance Company (FSCO A06-000202, November 9; 2007) Abdulkadir, Osman, Ahmed and Mohamed and Economical Mutual Insurance Co. FSCO A11-001975, A11-001977, A12-005066, October 30, 2014)
- TD General Insurance Company v. Matei et al OSCJ, Court File No. SC-13-29974, July 8, 2015
- Exhibit 1, Tab 4
- Exhibit 2 shows that Mr. Id was provided with notice of the amount to be repaid on March 6, 2013